UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): May 20, 2004
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CBRL GROUP, INC.
Tennessee 0-25225 62-1749513
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
305 Hartmann Drive, Lebanon, Tennessee 37087
(615) 444-5533
Item 7. Financial Statements and Exhibits
(a) Financial Statements. None
(b) Pro Forma Financial Information. None
(c) Exhibits.
99.1 Press Release dated May 20, 2004.
Item 9. Regulation FD Disclosure
On May 20, 2004, CBRL Group, Inc. issued the press release that is furnished as
Exhibit 99.1 to this Current Report on Form 8-K, which by this reference is
incorporated herein as if copied verbatim, with respect to certain third
quarter-end financial and other information. CBRL Group, Inc. also disclosed
information on current sales trends for the fourth quarter of fiscal 2004.
Item 12. Results of Operations and Financial Condition
The information set forth in Item 9 above is incorporated herein by this
reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 20, 2004 CBRL GROUP, INC.
By:/s/ James F.Blackstock
-----------------------------------------
Name: James F. Blackstock
Title: Senior Vice President, General
Counsel and Secretary
EXHIBIT 99.1
POST OFFICE BOX 787
LEBANON, TENNESSEE
37088-0787
PHONE: 615-443-9869
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CBRL GROUP, INC.
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CBRL
GROUP, INC.
Contact: Lawrence E. White
Senior Vice President/
Finance and
Chief Financial Officer
CBRL GROUP, INC. ANNOUNCES 13% INCREASE IN DILUTED NET INCOME PER SHARE FOR
THIRD QUARTER OF FISCAL 2004
Reports Current Sales Trends for the Fourth Quarter of Fiscal 2004
LEBANON, Tenn. (May 20, 2004) -- CBRL Group, Inc. (the "Company") (NASDAQ: CBRL)
today announced results for its third quarter of fiscal 2004 ended April 30,
2004, reporting diluted net income per share of $0.52, up 13.0% from $0.46 in
the third quarter of fiscal 2003. The Company also reported recent
fourth-quarter fiscal 2004 sales trends for the fourth quarter of fiscal 2004.
Highlights of the fiscal 2004 third-quarter results and current sales
trends include:
o Diluted net income per share for the third quarter of fiscal 2004 was
up 13.0% and net income was up 11.9% from the third quarter of fiscal
2003 on a 10.8% increase in total revenue.
o Comparable store restaurant sales for the quarter were up 4.9% in the
Company's Cracker Barrel Old Country Store(R) ("Cracker Barrel")
operations, and comparable store retail sales at Cracker Barrel were
up 6.2%.
o Comparable restaurant sales for the quarter were up 7.3% in the
Company's Logan's Roadhouse(R)("Logan's") restaurants.
o Eight new Cracker Barrel stores and four new Logan's company-owned
restaurants and two new franchised Logan's restaurants were opened
during the quarter.
o Approximately 1.3 million shares of the Company's common stock were
repurchased during the third quarter.
o Comparable store restaurant sales trends, nearly three weeks into the
fourth quarter of fiscal 2004, are down approximately 1.5% in Cracker
Barrel but up approximately 4.5% in Logan's. To date, fiscal 2004
fourth-quarter comparable store retail sales in Cracker Barrel are
down approximately 1.5-2%.
CBRL Announces Third Quarter Results
Page 2
May 20, 2004
Third-Quarter Fiscal 2004 Results
Total revenue for the third fiscal quarter ended April 30, 2004 of $584.3
million increased 10.8% from the third fiscal quarter of 2003. Comparable store
restaurant sales for the third quarter for the Cracker Barrel concept increased
4.9% (compared with a 1.7% decrease in last year's third quarter), with a 2.1%
higher average check (including 1.7% higher menu prices) and a 2.8% increase in
guest traffic. Comparable store retail sales at Cracker Barrel increased 6.2%
for the quarter (compared with a 2.3% decrease in last year's third quarter).
Logan's comparable restaurant sales for the quarter were up 7.3% (compared with
a 1.1% decrease in last year's third quarter), with a 5.7% increase in guest
traffic and a 1.6% higher average check, which included 0.7% of higher menu
prices. During the quarter, the Company opened eight new Cracker Barrel units
and four new company-owned Logan's restaurants; two new franchised Logan's
restaurants also opened during the quarter.
The Company reported net income for the third quarter of fiscal 2004 of
$26.2 million, or $0.52 per diluted share, reflecting increases of 11.9% and
13.0%, respectively, from net income of $23.4 million and diluted net income per
share of $0.46 for the third quarter of fiscal 2003. The results were in line
with the Company's guidance, given throughout the quarter, of a percentage
increase of up to the mid-teens in diluted net income per share.
Operating income for the third quarter grew 11.3% from the prior year
quarter and, at 7.3% of total revenue, was flat as a percent of total revenue
compared to the third fiscal quarter of 2003. Higher cost of goods sold during
the quarter offset lower labor, other store operating, and general and
administrative expenses. Increases in cost of goods sold reflected higher
commodity prices at both Cracker Barrel and Logan's and higher retail markdowns.
Cost of goods sold also included higher than expected retail markdowns
associated with the sale of certain aged inventory during a Porch Sale event
late in the quarter as well as an increase in costs related to discontinuance of
one of the Company's suppliers.
Commenting on the third-quarter results, CBRL Group, Inc. President and
Chief Executive Officer Michael A. Woodhouse said, "We achieved solid results in
our third quarter that were in line with our guidance and expectations. Our
double-digit growth in net income and diluted net income per share came during a
period of extraordinary product cost pressure for our industry, and we are
pleased with the responsiveness of our leadership teams at both Cracker Barrel
and Logan's to these extraordinary conditions. Our sales performance was strong,
including guest traffic increases at both our concepts."
During the quarter, the Company resumed repurchasing its common stock and
purchased approximately 1.3 million shares during the third quarter for
approximately $50.9 million, or approximately $38.61 per share. Approximately
900,000 shares remain under the previously announced share repurchase
authorizations.
CBRL Announces Third Quarter Results
Page 3
May 20, 2004
Nine-Month Fiscal 2004 Results
Total revenue for the nine months ended April 30, 2004 of nearly $1.8
billion increased 9.6% from the first nine months of 2003. Comparable store
restaurant sales for the nine months for the Cracker Barrel concept increased
2.9%, including a 1.7% higher average check and 1.2% higher guest traffic.
Comparable store retail sales at Cracker Barrel increased 7.9% for the first
nine months of fiscal 2004. Logan's comparable restaurant sales for the first
nine months were up 4.4% with a 3.6% increase in guest traffic and a 0.8% higher
average check. The Company opened 16 new Cracker Barrel units and 11 new
company-owned Logan's locations during the first nine months of the fiscal year;
three new franchised Logan's restaurants also opened.
The Company reported net income for the first nine months of fiscal 2004 of
$83.3 million, or $1.65 per diluted share, reflecting increases of 17.4% and
18.7%, respectively, from net income of $71.0 million and diluted net income per
share of $1.39 for the first nine months of fiscal 2003.
Current Sales Trends and Earnings Outlook
The Company urges caution in considering its current trends and the outlook
disclosed in this press release. The restaurant industry is highly competitive,
and trends and guidance are subject to numerous factors and influences, some of
which are discussed in the cautionary language at the end of this press release.
The Company disclaims any obligation to update disclosed information on trends
or expectations other than in its periodic filings with the Securities and
Exchange Commission ("SEC").
The Company reported that comparable store restaurant sales for the nearly
three-week period of its fourth quarter of fiscal 2004 are down approximately
1.5% in its Cracker Barrel units compared with the same period a year ago,
reflecting approximately 1-1.5% higher average check, including 1.7% in menu
price increases, but approximately 2.5-3% lower guest traffic. Quarter-to-date
retail sales in the comparable units are down approximately 1.5-2%.
Quarter-to-date comparable restaurant sales in the Company's Logan's restaurants
are up approximately 4.5% compared with last year, reflecting approximately
0.5-1% higher guest traffic and approximately 3.5-4% higher average check.
Logan's introduced a new menu in early May that included a price increase of
approximately 2.3%.
Previously, the Company expected a percentage increase in diluted net
income per share up to the mid-teens for the fourth quarter of fiscal 2004. That
outlook was based on low double-digit total revenue growth. As noted above, over
the past few weeks the Company has experienced a softening in sales or guest
traffic from previous trends in both of its concepts, and recent trends are
below previous expectations. Because this change in trends is so recent, the
Company is not yet sufficiently comfortable to assess how trends might change or
continue over the remainder of the quarter, especially for the seasonally strong
period after Memorial Day. As a result, the Company believes that it is not in a
position to confirm its previous guidance or provide an update at this time. The
Company will endeavor to update its guidance after it has obtained more
visibility into the factors behind the revenue softness.
CBRL Announces Third Quarter Results
Page 4
May 20, 2004
Fiscal 2004 Third-Quarter Conference Call
The live broadcast of the CBRL Group quarterly conference call will be
available to the public on-line at www.vcall.com or www.cbrlgroup.com today
beginning at 11:00 a.m. (EDT). The on-line replay will follow immediately and
will be available through May 27, 2004.
Headquartered in Lebanon, Tennessee, CBRL Group, Inc. presently operates
498 Cracker Barrel Old Country Store restaurants and gift shops located in 41
states and 107 company-operated and 19 franchised Logan's Roadhouse restaurants
in 17 states.
Except for specific historical information, many of the matters discussed
in this press release may express or imply projections of revenues or
expenditures, statements of plans and objectives or future operations or
statements of future economic performance. These, and similar statements are
forward-looking statements concerning matters that involve risks, uncertainties
and other factors which may cause the actual performance of CBRL Group, Inc. and
its subsidiaries to differ materially from those expressed or implied by this
discussion. All forward-looking information is provided by the Company pursuant
to the safe harbor established under the Private Securities Litigation Reform
Act of 1995 and should be evaluated in the context of these factors.
Forward-looking statements generally can be identified by the use of
forward-looking terminology such as "assumptions", "target", "guidance",
"outlook", "plans", "projection", "may", "will", "would", "expect", "intend",
"estimate", "anticipate", "believe", "potential" or "continue" (or the negative
or other derivatives of each of these terms) or similar terminology. Factors
which could materially affect actual results include, but are not limited to:
the actual results of pending or threatened litigation or governmental
investigations and the costs and effects of negative publicity associated with
these activities; commodity, workers' compensation, group health and utility
price changes; the effects of uncertain consumer confidence or general or
regional economic weakness on sales and customer travel activity; consumer
behavior based on concerns over nutritional or safety aspects of the Company's
products or restaurant food in general; competitive marketing and operational
initiatives; the ability of the Company to identify, acquire and sell successful
new lines of retail merchandise; the effects of plans intended to improve
operational execution and performance; changes in or implementation of
additional governmental or regulatory rules, regulations and interpretations
affecting accounting, tax, wage and hour matters, health and safety, pensions,
insurance or other undeterminable areas; practical or psychological effects of
terrorist acts or war and military or government responses; the effects of
increased competition at Company locations on sales and on labor recruiting,
cost, and retention; the ability of and cost to the Company to recruit, train,
and retain qualified restaurant hourly and management employees; disruptions to
the company's restaurant or retail supply chain; changes in foreign exchange
rates affecting the Company's future retail inventory purchases; the
availability and cost of acceptable sites for development and the Company's
ability to identify such sites; changes in accounting principles generally
accepted in the United States of America or changes in capital market conditions
that could affect valuations of restaurant companies in general or the Company's
goodwill in particular; increases in construction costs; changes in interest
rates affecting the Company's financing costs; and other factors described from
time to time in the Company's filings with the SEC, press releases, and other
communications.
CBRL Announces Third Quarter Results
Page 5
May 20, 2004
CBRL GROUP, INC.
CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In thousands, except per share amounts)
Third Quarter Ended Nine Months Ended
----------------------------- -----------------------------------------
4/30/04 5/2/03 Change 4/30/04 5/2/03 Change
---------- ----------- ------ ------------ ----------- -------
Total revenue $ 584,282 $ 527,189 11% $ 1,773,448 $ 1,617,847 10%
Cost of goods sold 190,718 165,378 15 590,145 521,455 13
---------- ----------- ----------- -----------
Gross profit 393,564 361,811 9 1,183,303 1,096,392 8
Labor & other related expenses 221,230 201,170 10 654,540 605,357 8
Other store operating expenses 98,890 92,573 7 297,925 280,558 6
---------- ----------- ------------ -----------
Store operating income 73,444 68,068 8 230,838 210,477 10
General and administrative 30,592 29,577 3 94,525 93,798 1
---------- ----------- ------------ -----------
Operating income 42,852 38,491 11 136,313 116,679 17
Interest expense 2,007 2,214 (9) 6,298 6,659 (5)
Interest income -- -- -- 5 73 (93)
---------- ----------- ------------ -----------
Pretax income 40,845 36,277 13 130,020 110,093 18
Provision for income taxes 14,663 12,878 14 46,677 39,083 19
---------- ----------- ------------ -----------
Net income $ 26,182 $ 23,399 12 $ 83,343 $ 71,010 17
========== =========== ============ ===========
Earnings per share:
Basic $ 0.53 $ 0.48 10 $ 1.70 $ 1.43 19
========== =========== ============ ===========
Diluted $ 0.52 $ 0.46 13 $ 1.65 $ 1.39 19
========== =========== ====== ============ =========== =======
Weighted average shares:
Basic 49,128 49,077 -- 48,926 49,609 (1)
Diluted 50,519 50,767 -- 50,560 51,178 (1)
Ratio Analysis
Net sales:
Restaurant 82.2% 82.1% 78.6% 79.1%
Retail 17.7 17.8 21.3 20.8
---------- ----------- ------------ -----------
Total net sales 99.9 99.9 99.9 99.9
Franchise fees and royalties 0.1 0.1 0.1 0.1
---------- ----------- ------------ -----------
Total revenue 100.0 100.0 100.0 100.0
Cost of goods sold 32.6 31.4 33.3 32.2
---------- ----------- ------------ -----------
Gross profit 67.4 68.6 66.7 67.8
Labor & other related expenses 37.9 38.1 36.9 37.4
Other store operating expenses 16.9 17.6 16.8 17.4
--------- ----------- ------------ -----------
Store operating income 12.6 12.9 13.0 13.0
General and administrative 5.3 5.6 5.3 5.8
---------- ----------- ------------ -----------
Operating income 7.3 7.3 7.7 7.2
Interest expense 0.3 0.4 0.4 0.4
Interest income -- -- -- --
---------- ----------- ---------- -----------
Pretax income 7.0 6.9 7.3 6.8
Provision for income taxes 2.5 2.5 2.6 2.4
---------- ----------- ------------ -----------
Net income 4.5% 4.4% 4.7% 4.4%
========== ========== ============ ===========
CBRL Announces Third Quarter Results
Page 6
May 20, 2004
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited)
(In thousands)
4/30/04 8/1/03
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Assets
Cash and cash equivalents $ 14,035 $ 14,389
Other current assets 157,933 161,670
Property and equipment, net 1,091,842 1,040,315
Goodwill 92,882 92,882
Other assets 20,338 17,067
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Total assets $ 1,377,030 $ 1,326,323
============ ============
Liabilities and Stockholders' Equity
Accounts payable $ 39,534 $ 82,172
Other current liabilities 211,035 164,542
Long-term debt 183,757 186,730
Other long-term obligations 100,995 97,983
Stockholders' equity 841,709 794,896
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Total liabilities and stockholders' equity $ 1,377,030 $ 1,326,323
============ ============
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(Unaudited)
(In thousands)
Nine Months Ended
4/30/04 5/2/03
Cash flows from operating activities: ----------- -----------
Net income $ 83,343 $ 71,010
Depreciation and amortization 47,160 48,316
Loss on disposition of property and equipment 1,846 478
Accretion on zero-coupon notes 4,027 3,916
Net changes in other assets and liabilities 732 30,342
----------- -----------
Net cash provided by operating activities 137,108 154,062
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (99,982) (85,260)
Proceeds from sale of property and equipment 777 1,517
----------- -----------
Net cash used in investing activities (99,205) (83,743)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 150,000 276,600
Principal payments under long-term obligations (157,082) (276,665)
Deferred financing costs (1) (1,203)
Proceeds from exercise of stock options 48,869 27,626
Purchase and retirement of common stock (69,206) (95,003)
Dividends on common stock (10,837) (1,043)
----------- -----------
Net cash used in financing activities (38,257) (69,688)
Net (decrease) increase in cash and cash equivalents (354) 631
Cash and cash equivalents, beginning of period 14,389 15,074
----------- -----------
Cash and cash equivalents, end of period $ 14,035 $ 15,705
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CBRL Announces Third Quarter Results
Page7
May 20, 2004
CBRL GROUP, INC.
Supplemental Information
(Unaudited)
As of As of As of
4/30/04 8/1/03 5/2/03
Common shares outstanding 48,706,391 47,872,542 48,350,589
=========== ========== ===========
Units in operation:
Cracker Barrel 496 480 472
Logan's Roadhouse - company-owned 107 96 96
----------- ---------- -----------
Total company-owned units 603 576 568
Logan's Roadhouse - franchised 19 16 13
----------- ---------- -----------
System-wide units 622 592 581
=========== ========== ===========
Third Quarter Ended Nine Months Ended
Net sales in company-owned stores: 4/30/04 5/2/03 4/30/04 5/2/03
------------- ------------- -------------- -------------
(In thousands)
Cracker Barrel - restaurant $ 394,926 $ 360,862 $ 1,157,117 $ 1,076,876
Cracker Barrel - retail 103,715 93,685 378,467 336,517
------------- ------------- -------------- -------------
Cracker Barrel - total 498,641 454,547 1,535,584 1,413,393
Logan's Roadhouse 85,106 72,278 236,454 203,530
------------- ------------- -------------- -------------
Total net sales 583,747 526,825 1,772,038 1,616,923
Franchise fees and royalties 535 364 1,410 924
------------- ------------- -------------- -------------
Total revenue $ 584,282 $ 527,189 $ 1,773,448 $ 1,617,847
============= ============= ============== =============
Operating weeks - company-owned stores:
Cracker Barrel 6,417 6,127 19,000 18,120
Logan's Roadhouse 1,366 1,238 3,962 3,543
Average comparable store sales -
company-owned stores: (In thousands)
Cracker Barrel - restaurant $ 800.5 $ 763.3 $ 2,377.1 $ 2,309.8
Cracker Barrel - retail 208.3 196.1 772.5 716.1
------------- ------------- -------------- -------------
Cracker Barrel - total $ 1,008.8 $ 959.4 $ 3,149.6 $ 3,025.9
============= ============= ============== =============
Logan's Roadhouse $ 796.6 $ 742.5 $ 2,281.7 $ 2,184.8
============= ============= ============== =============
Capitalized interest $ 140 $ 104 $ 428 $ 345
============= ============= ============== =============
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